It’s not often that a new product release has the potential to reshape the way people work and play. The PC, the browser, the smartphone – all of these products fell into that category.

Microsoft’s new HoloLens has the potential to do the same. (Check out some photos from Gizmodo here -- they don't live up to the actual experience even a little bit -- and this video, which doesn't do it justice, either).

Yes, that’s a big claim. But I’m here to challenge your thinking with this assertion: Over the next few years, HoloLens will set the bar for a new type of computing experience that suffuses our jobs, our shopping experiences, our methods for learning, and how we experience media, among other life vectors. And other vendors will have to respond to this innovation in holographic, mixed reality computing.

Based on what we saw today and on background conversations, Forrester believes that Microsoft’s Windows 10 will persuade enterprises and consumers to upgrade from Windows 7 (something Windows 8 didn’t do) and be an easy upgrade from Windows 8. Getting the world’s 1.5 billion Windows PCs on this new software platform will re-establish Microsoft’s dominance in personal computing with a mobile extension.

The technology advances in Windows 10 include a single and integrated experience across PCs and tablets with a single platform and app store; continuous software improvements, and big security improvements, and a new set of enterprise features. (Forrester clients can get our enterprise perspective in our new report, ‘Microsoft Gets Its Flagship OS Back On Track With Windows 10.) Windows 10 even brings together Windows and Xbox -- giving gamers and game developers access to Xbox experiences on the PC.

HoloLens Is A Powerful New Technology To Deliver Mixed Reality Experiences

Previously Microsoft tried to discourage customers from using virtual desktop infrastructure (VDI) on top of rival operating systems by applying complex licensing rules involving various TLAs such as RUR, VDA and CSL (which I’m not going to explain here, because they are, thankfully, no longer needed). The USL is far simpler - clear Windows licensing replacing translucent frosted glass, so to speak.

Very much in the shadows of all the press coverage and hysteria attendant on emerging cloud architectures and customer-facing systems of engagement are the nitty-gritty operational details that lurk like monsters in the swamp of legacy infrastructure, and some of them have teeth. And sometimes these teeth can really take a bite out of the posterior of an unprepared organization.

One of those toothy animals that I&O groups are increasingly encountering in their landscapes is the problem of what to do with Windows Server 2003 (WS2003). It turns out there are still approximately 11 million WS2003 systems running today, with another 10+ million instances running as VM guests. Overall, possibly more than 22 million OS images and a ton of hardware that will need replacing and upgrading. And increasing numbers of organizations have finally begun to take seriously the fact that Microsoft is really going to end support and updates as of July 2015.

Based on the conversations I have been having with our clients, the typical I&O group that is now scrambling to come up with a plan has not been willfully negligent, nor are they stupid. Usually WS2003 servers are legacy servers, quietly running some mature piece of code, often in satellite locations or in the shops of acquired companies. The workloads are a mix of ISV and bespoke code, but it is often a LOB-specific application, with the run-of-the-mill collaboration, infrastructure servers and, etc. having long since migrated to newer platforms. A surprising number of clients have told me that they have identified the servers, but not always the applications or the business owners – often a complex task for an old resource in a large company.

A group of us just published an analysis of VMworld (Breaking Down VMworld), and I thought I’d take this opportunity to add some additional color to the analysis. The report is an excellent synthesis of our analysis, the work of a talented team of collaborators with my two cents thrown in as well, but I wanted to emphasize a few additional impressions, primarily around storage, converged infrastructure, and the overall tone of the show.

First, storage. If they ever need a new name for the show, they might consider “StorageWorld” – it seemed to me that just about every other booth on the show floor was about storage. Cloud storage, flash storage, hybrid storage, cheap storage, smart storage, object storage … you get the picture.[i] Reading about the hyper-growth of storage and the criticality of storage management to the overall operation of a virtualized environment does not drive the concept home in quite the same way as seeing 1000s of show attendees thronging the booths of the storage vendors, large and small, for days on end. Another leading indicator, IMHO, was the “edge of the show” booths, the cheaper booths on the edge of the floor, where smaller startups congregate, which was also well populated with new and small storage vendors – there is certainly no shortage of ambition and vision in the storage technology pipeline for the next few years.

Bill Gates said "People everywhere love Windows.” Whether or not you agree, the fact that Microsoft Windows remains the de facto standard for business productivity after nearly 3 decades, suggests that many still do. But as the sales figures of Microsoft’s competitors suggest, people everywhere love lots of other things too. And one of the reasons they love them so much is that they like to get things done, and sometimes that means getting away from the office to a quiet place, or using a technology that isn’t constrained by corporate policies and controls, so they can be freer to experiment, grow their skills and develop their ideas uninhibited.

Technology managers I speak with are aware of this, but they’re justifiably paranoid about security, costs, and complexity. So the result of these conflicting forces coming together is inspiring rapid innovation in a mosaic of technologies that Forrester collectively calls digital workspace delivery systems. It involves many vendors, including Microsoft, Citrix, VMware, Dell, nComputing, Amazon Web Services, Fujitsu, AppSense, Moka5, and more. The goal of our work is to help companies develop their capabilities for delivering satisfying Microsoft Windows desktop and application experiences to a wide range of users, devices, and locations.

One noteworthy detail emerged from Microsoft’s quarterly earnings call yesterday: A $900 million write-down for “inventory adjustments” related to the underperformance of Windows RT. This result didn’t come as a surprise because:

Microsoft’s Windows RT strategy has long been puzzling. Launching the Surface RT device before the Windows 8-based Surface Pro offering never made sense – an insufficient number of Modern UI apps made the Surface RT hard to position and sell from the beginning. Samsung recognized the shortcomings of RT early on, exitingthe market a mere three months after RT’s release.

Microsoft still hasn’t convinced developers that Windows RT should be a top priority. Our survey of 2,038 global software developers revealed that developer support for Windows RT trails Windows 7, Windows 8, Apple iOS, Google Android, and even Apple OS X. For example, while 21% of global developers support or plan to support Windows RT, 64% say the same for “Windows 7 and earlier versions.”

My Forrester colleagues Ted Schadler and John McCarthy have written about the differences between Systems of Reference (SoR) and Systems of Engagement (SoE) in the customer-facing systems and mobility, but after further conversations with some very smart people at IBM, I think there are also important reasons for infrastructure architects to understand this dichotomy. Scalable and flexible systems of engagement, engagement, built with the latest in dynamic web technology and the back-end systems of record, highly stateful usually transactional systems designed to keep track of the “true” state of corporate assets are very different animals from an infrastructure standpoint in two fundamental areas:

Suitability to cloud (private or public) deployment – SoE environments, by their nature, are generally constructed using horizontally scalable technologies, generally based on some level of standards including web standards, Linux or Windows OS, and some scalalable middleware that hides the messy details of horizontally scaling a complex application. In addition, the workloads are generally highly parallel, with each individual interaction being of low value. This characteristic leads to very different demands on the necessity for consistency and resiliency.

Today’s new details on Windows 8.1 show that Microsoft is on track for updating Windows annually, that they’re engaged in significant product improvements and they are listening to market feedback. There were a ton of improvements and new built-in apps. Among all the details, three were the most significant to advancing Windows:

· Smart Search. By combining Bing’s web search with search across my devices and Skydrive, search becomes more relevant and personal. We’ll be watching to see how third-party developers can use this and where Microsoft goes with it. Very interesting.

· Making Windows desktop modern and more synergistic. The tweaks to allow the desktop background underneath the Start Screen and the return of the Start button make it feel a little less like I’m running two PCs in one, but the difference is still jarring.

Windows 8 is a make or break product launch for Microsoft. Windows will endure a slow start as traditional PC users delay upgrades, while those eager for Windows tablets jump in. After a slow start in 2013, Windows 8 will take hold in 2014, keeping Microsoft relevant and the master of the PC market, but simply a contender in tablets, and a distant third in smartphones.

Microsoft has long dominated PC units, with something more than 95% sales. The incremental gains of Apple’s Mac products over the last five years haven’t really changed that reality. But the tremendous growth of smartphones, and then tablets, has. If you combine all the unit sales of personal devices, Microsoft’s share of units has shrunk drastically to about 30% in 2012.

It’s hard to absorb the reality of the shift without a picture, so in the report “Windows: The Next Five Years,” we estimated and forecast the unit sales of PCs, smartphones, and tablets from 2008 to 2016 to create a visual. As you can see below in the chart of unit sales, Microsoft has and will continue to grow unit sales of Windows and Windows Phone. But the mobile market grew very fast in the last five years, while Microsoft had tiny share in smartphones and no share in tablets.

If you look at the results by share of all personal devices, below, you can see how big a shift happened over the last five years as smartphone units exploded and the iPad took hold.